Industry NewsMortgage

Feds announce partial settlement with ‘robo signing’ servicers

State attorneys general continue with separate probe
Published on Apr 14, 2011

In a partial settlement addressing so-called "robo-signing" foreclosure practices, the nation's largest loan servicers have agreed to hire outside consultants to review foreclosures initiated in 2009 and 2010, and to compensate homeowners who should not have been foreclosed on.Consent agreements announced Wednesday by the Office of the Comptroller of the Currency, the Federal Reserve and the Office of Thrift Supervision also prohibit loan servicers from foreclosing on homeowners who have been approved for loan modifications.Federal regulators said they will assess fines against loan servicers separately, and that state attorneys general who are conducting their own joint investigation into the handling of foreclosure paperwork will continue to have the right to take additional enforcement actions.Critics said that the failure of federal regulators and state attorneys general to forge a universal settlement agreement with loan servicers raises the likelihood that the impacts o...

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